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You buy things till your wallet is empty. So you raid the savings account to buy more stuff. Then you get a loan, and buy more stuff. Another loan, another, you keep buying stuff… Finally you’re selling off the tools you had used to make a living. That’s where the country is now because of the huge imbalance in our trade relationships. We buy more from them than they buy from us and we have let this go on and on and on. This is the deficit we should be worried about.

The Root

Pick a national problem, and the odds are that our trade imbalance is aggravating it. Our trade deficits literally suck money out of the country. When looking up the numbers I had to double check, our annual trade deficits are so huge. In the chart below that first line under the dates represents $100 billion. Look at what happened in the late 90s, when we opened the China flodgates. (Click to enlarge):

In the 70’s the trade balance dipped below zero because of oil, and the country responded with conservation and the beginning of the search for alternatives — until Reagan. To make matters worse, Reagan preached “free trade” — as in use cheap foreign labor to break American unions. (But Reagan also enforced rules against “dumping” and other trade violations.) The real break in our balance of trade clearly begins around the time that NAFTA and the World Trade Organization went into effect, and then went absolutely nuts after China was brought in. Between 2001 and 2009 we lost 1/3 of all of our manufacturing jobs, more than 50,000 factories, and entire industries. We drained trillions of dollars out of our economy.

Causes

Energy. The trade imbalance started with OPEC and the oil price shocks in 1970s, and oil imports since then. This is a huge problem but the beneficiaries of this trade imbalance fight to keep things the way they are. (By the way, next time you hear someone of FOX running down our country’s green energy efforts, knocking the Chevy Volt or denying climate change, think abougt this: Fox’s second-largest shareholder is a billionaire Saudi oil prince. Also, FYI, Koch brothers == oil.)“Asymmetries.” One-sided trade relationships are now draining money from our country at a dramatic rate. We are much more open to imports than many of our “trading partners” are. We buy from them, they don’t buy from us — and we just let this continue year after year.“Strong” dollar policies, combined with currency manipulation by others. A strong dollar is great for Wall Street, but is terrible for manufacturers and producers. When the dollar is “strong” it means that goods made here cost more than goods made elsewhere. The dollar went way up in the early 1980s because of the borrowing following the Reagan tax cuts for the rich and the trade deficit went up along with it. Dollars had to be purchased to buy our bonds, creating a “demand” for them, which increased their “price,” contributing significantly to the then-record U.S. trade deficits. Meanwhile, we let countries like China manipulate their currencies to make them “weak,” which means goods made there cost must less in world markets.Trade cheating. Many countries violate trade rules (like manipulating currency), which brings them a competitive advantage in world markets. We don’t call them on it for various reasons, largely because powerful interest groups benefit from the cheating. When goods from elsewhere cost less than they should it undermines our own manufacturers and producers, but the lower prices enrich distributors, retailers, and others.

The Trap

Here is the trap of our one-sided trade agreements: these “free-trade” agreements increase exports. The reason this is a trap and a problem is that they increase imports more. So, on the one hand the agreements create and enrich interest groups that push for continuation and expansion of the agreements, while on the other hand they increase trade deficits, which drain our economy.
Example: We opened up trade with China. China lets their imports grow, so we have some appearance of increasing sales to China, but they keep barriers while manipulating currency and subsidizing their companies, and their exports to us grow faster than their imports from us, which increases the imbalance. They can steadily reduce their import barriers and let their currency rise slowly, giving the appearance of moving toward open trade and providing what appear to be incentives to keep the relationship going, but by also increasing their exports they continue to drain us.

The Answer: Balance

We’re A Country. Deal With It.
Here’s the important thing to understand, even if you think the idea of “countries” is out of date, and don’t think of the United States as a country is important anymore: Others see themselves as countries and they organize their countries to win as countries. And you don’t live in those countries. They see us – this geographic region we live in — as a country, even if we do not, and they plan their efforts accordingly. They attack us as a country and you happen to live in the geographic region called a country that they are attacking. So as they seize the jobs and factories and industries from our country all of us who happen to live within the geographic borders that we refuse to call a country lose out economically, whether we believe we are part of this country or not. This means we have to respond as a country regardless of whether our ideology says we shouldn’t. We are under economic attack as a country, so national government still matters as the only force capable of organizing a national response.

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Oil-backed conservatives have been absolutely ecstatic over the collapse of American solar-power company Solyndra and the rise of China as the dominant country in green energy, because they think they can turn this into a story that makes President Obama and government look bad. It also gives them a bonus opportunity to attack alternatives to coal and oil. So is there really a “scandal” behind what happened to Solyndra? Or is this just one more conservative smear, made up from whole cloth and spread around conservative outlets, talk radio and FOX News, hoping the “mainstream media” will be tricked into propelling the propaganda out to the public?The Smear Machine
When Bill Clinton was President conservatives developed and refined a “smear machine” technique of making up accusation after accusation after accusation (after accusation after accusation), repeating them endlessly and hysterically in conservative-funded outlets, and working to get major media outlets to pick up and repeat them. Unfortunately they were often successful at driving phony smears into the public arena. Even though the stories were invariably refuted after investigation, by the time each smear was refuted many, many more were circulating. After a while people began to believe “where there’s smoke there’s fire.” One such story that major outlets repeated involved the supposed “sale” of an Arlington cemetery plot for campaign contributions. When it was proven to be nothing more than a false smear the repetition in major outlets was justified “because it’s just the sort of thing he might have done.”
In the 2004 election we saw the process repeated with the “Swift Boat” smear that turned around John Kerry’s lead in the polls. It was entirely a made-up lie but the mainstream media picked it up and propelled it.

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Well here’s a surprise: conservatives and oil interests are pushing deceptive and destructive stories about President Obama and clean energy. Imagine that! Their intent (as always) is to turn people against President Obama, clean energy, national energy policy, stimulus to help the economy, and government in general. It’s what they do. Here is some information to help you push back on the latest whipped-up, anti-green, anti-government, anti-Obama “scandal.”Solyndra
Solyndra was a startup solar-power equipment manufacturer based in Fremont, California that went bankrupt at the end of August. The company’s solar collectors used a special tubular internal design that let it collect light from all directions, and were made with a copper-indium-gallium-diselenide (CIGS) thin film that avoided using then-expensive silicon. It was one of several companies that received assistance from the government, in an attempt to push back on China’s strategic targeting of green-energy manufacturing.
The company, partly backed by the conservative Walton family had received a loan guarantee from the Department of Energy. The loan, which was originally pushed by the Bush administration, was 1.3% of the DOE portfolio.
The economy tanked and cut demand, and at the same time Solyndra could not compete with subsidized companies located in China as they rapidly scaled up. So Solyndra ran out of money. Conservatives and oil interests are using the bankruptcy as a platform to attack green energy and the idea of green jobs in general, solar power in particular, President Obama as always, stimulus funding and the idea of developing a national strategic industrial policy to push back on China and others who have their own national policies to win this key industry of the future.

On many levels, the October report was much stronger than expected. Forecasters had been expecting a gain of only 60,000 jobs. The report also revised the numbers for August and September, showing 110,000 fewer jobs losses than previously estimated. Hourly wages were slightly higher, too.
… A broader measure of unemployment, which includes people who are working part-time because they cannot find full-time jobs and people who have given up looking for work, ticked down slightly to 17 percent from 17.1 percent in September.

At this rate it would take more than 15 years to make up the job shortfall from the downturn, but at least the economy is moving in the right direction.

Meanwhile, the Federal Reserve this week announced “quantitative easing,” through which they will pump another $600 billion into the economy by purchasing US treasury bills, also known as “printing money.” I guess the idea is to top off and overflow the coffers of the already-wealthy, thereby forcing up the price of stocks and other assets held by the already-wealthy, while keeping interest rates low on the savings of working and retired people. At the same time conservatives in Congress are demanding further extensions of tax cuts for the rich, which did so well stimulating jobs up to now. The thinking seems to be that at some point the really, really wealthy will have so astonishingly much extra cash on hand that they will hire a few more servants, which will then stimulate purchasing of necessities by said servants, which will then drive the economy.
It’s time to call out this nonsense for what it is.We Need A Bold Plan
It is time for the President to announce a BOLD PLAN for a job-creation agenda. (Actually, it was time for him to do this a year or two ago…) Here are three badly-needed 5-year plans:
* A 5-year plan to revive American manufacturing. This is how our country and our people can make a living again.
* A 5-year plan to bring America’s infrastructure into the 21st century, making our economy competitive again.
* A 5-year plan to make our homes, buildings and electric grid energy efficient to lower our energy costs and reduce our imports of oil.These are things that we have to do anyway. We have a lot of unemployed people, and any one of these three plans will put a huge dent in unemployment. Any one of these three revives our economy. Any one of these three restores American competitiveness. ALL THREE restore us as the economy leader in the world.
And, the politics will be good because it is what is needed and good for the country and everyone knows it.Sign up here for the CAF daily summary.

Tonight President Obama will talk about the Gulf oil catastrophe, and, hopefully, overall energy and climate policy. A look back at President Carter’s fight over energy brings some context to this situation.

“Tonight I want to have an unpleasant talk with you about a problem unprecedented in our history. With the exception of preventing war, this is the greatest challenge our country will face during our lifetimes. The energy crisis has not yet overwhelmed us, but it will if we do not act quickly.”

Carter said solving this energy problem would be “The moral equivalent of war.” Please, please read the speech, and its ten principles. It will help set the stage for understanding where we are today.

If we fail to act soon, we will face an economic, social and political crisis that will threaten our free institutions.

But we still have another choice. We can begin to prepare right now. We can decide to act while there is time.

That is the concept of the energy policy we will present on Wednesday. Our national energy plan is based on ten fundamental principles.

The first principle is that we can have an effective and comprehensive energy policy only if the government takes responsibility for it and if the people understand the seriousness of the challenge and are willing to make sacrifices.

We failed to act soon. And we face an economic, social and political crisis that threatens our free institutions.

It turned out to be a very, very hard fight. The right’s new network of corporate-funded “think tanks” was setting up shop and beginning to spread their poisonous, divisive, anti-government propaganda. They didn’t like the idea of government trying to solve problems. The big oil giants certainly didn’t want government researching alternatives to their gravy train. We understand the right’s operation today, but people did not yet understand what was going on because the country had never been subjected to a destabilization campaign of this magnitude — from the inside.

You can really feel the effect of the right’s campaign when you read a speech Carter gave two years later.On July 15, 1979, President Jimmy Carter gave what is called the “Crisis of Confidence” speech. It’s also known as the “Malaise” speech. I consider it to be one of the great speeches by a President. Carter again talked to the country about energy policy, pleading with people to take this seriously. He said, “The energy crisis is real. It is worldwide. It is a clear and present danger to our Nation. These are facts and we simply must face them.”

Well, we didn’t face them. Instead the country elected Reagan who immediately took the solar panels off of the White House, killed mass transit and alternative energy programs and steered the country on a path of toward dominance by the wealthy and big corporations – especially oil companies.

Now it is 2010, we have been at war in the Middle East for years, carbon in the air is raising the planet’s temperature and melting the Arctic ice cap, and … the oil in the Gulf. President Obama is giving his first Oval Office speech this evening and all of this is the broader context. Will he take on the entrenched interests that defeated Carter and brought us Reagan and later the two oil-company executives who invaded Iraq, encouraged buying Hummers and left us with a $1.4 trillion deficit?

As Carter said, “It is a clear and present danger to our Nation. These are facts and we simply must face them.”

One party in Washington is following a strategy of obstructing everything, believing that the public will blame the other party for nothing getting done. The other party refuses to use the powers it has to act on the nation’s agenda, fearing that the public will thing they’re being mean or something. So we’re stuck, standing still, getting nothing done. And the rest of the world moves forward with the green manufacturing revolution, taking the jobs, taking the industries, taking the momentum, taking the future.

Here is my point: We’re standing still, and other nations are moving ahead. Literally. High-speed rail is an example of this difference. Compare China’s investment in public infrastructure like high-speed rail with our own.
At Open Left Saturday, Paul Rosenberg wrote a post about China’s wonderful new high-speed rail system, Whose near future is our far future: Europe, China or California?, saying,

“It’s really amazing how much rail they’re going to have built within the next two years, 42 lines including connections between China’s most important cities. … The US, in contrast, will have one line built in four years, connecting Tampa and Orlando. Tampa and Orlando? That’s not so much a high-speed rail line, more an overgrown Disney ride.”

China has a national strategy of massive investment in public infrastructure to create jobs and stimulate manufacturing. This investment then leaves behind a modernized manufacturing infrastructure as well as a much more efficient transportation system. This is part of a larger strategy to develop an economy that is much more energy efficient than their competitors, which means they will be better able as a nation to compete economically.
President Obama has been trying to get our own country to invest strategic projects like this. If we can invest in a more efficient economy then WE will be more competitive in the future than we are today. This means more jobs and a higher standard of living in the future, as these investments pay off. But his efforts meet resistance every step of the way. Just one example of this is how the entrenched oil and coal interests take advantage of the corruption of Washington, especially the Senate, to block these efforts. They also invest heavily in poisoning the information that reaches the public, like funding “climate skeptics” and think tanks that pump out “ideology” that isn’t really ideas but is propaganda that serves their own financial interests. They and others are doing everything they can to block us from investing in the green manufacturing revolution while the rest of the world is moving ahead.
America is stuck in this weird ideology that says government is bad, and it is wrong for government to help the people by planning and investing in our future. There is a “market fundamentalism” that says that markets must decide things, not democracy. They say our people through our government will make bad decisions, that companies are much more efficient at making decisions, so we should instead let the people who run the largest companies decide how to use our country’s resources, labor force, and capital. They say this is much more “efficient” than letting democracy make decisions.Here is a fact: nations compete. You might believe this is an outmoded concept. It might not fit with the business model of multinational corporations. But we still have countries that see themselves as unified nations with a shared identity, and these nations compete. They compete with US. China is competing with US and the rest of the world, to bring manufacturing to itself, and using national strategies. We are not responding as a nation.
When someone is in a fight with you, you have a much better chance of winning if you at least understand that you are in a fight and get yourself organized to do something about it! How hard is that to understand? China and other countries are in a fight with us for economic dominance. Manufacturing is the key to economic power, and they are fighting to win manufacturing business away from us.
I don’t say this to particularly criticize China. The Chinese don’t owe me a job. China is just taking care of its own. It should. That is what nations are supposed to do. So to the extent that we still see ourselves as a NATION, we need to take care of OUR own. We need a national economic/industrial strategy, where we say THIS is how WE are going to compete.
If America is still a nation with a democracy we’re going to have to step up to the plate and compete as a country and as a people.

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This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.
American competitiveness is severely hobbled by our “free market” and anti-government attitudes. One way our competitors hold us back is by encouraging this outdated ideology. Result: other countries have national economic/industrial strategies and we don’t. So we lose.

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All of a sudden you can’t get away from stories about the need to drill for oil in Alaska and off our coasts.
So what is going on? Why are there so MANY stories in the news, op-eds, blogs, columnists, letters to the editor and on the radio saying that drilling will solve the problem? Rational, informed people understand that it would take almost a decade before any new production showed up, that we are already at refinery limits and that we could have alternatives and conservation in place much faster with a much bigger impact. Why this huge push for drilling today?
People who look at this as a policy issue and try to respond with facts and logic are missing what is happening here, and misunderstanding how the corporate/conservative machine operates: SOMEone makes a bunch of MONEY if we open up drilling. And that SOMEone is paying to push a bill through Congress. It’s just that simple. That’s how the right’s machine works today. It is entirely pay-for-play. I suspect that we are seeing a standard conservative multi-front coordinated PR push in support of an upcoming legislative agenda. This is how the corporate right organizes a campaign.
According to Google News there are 2102 news articles this morning under the heading, “Bush asks Congress to clear way for offshore oil drilling.” Example, The Kansas City Star, Bush to Congress: Embrace energy exploration now,

With gasoline topping $4 a gallon, President Bush urged Congress on Wednesday to lift its long-standing ban on offshore oil and gas drilling, saying the United States needs to increase its energy production. …
“There is no excuse for delay,” the president said in a statement in the Rose Garden. With the presidential election just months away, Bush made a pointed attack on Democrats, accusing them of obstructing his energy proposals and blaming them for high gasoline costs

The most fundamental fact about oil worldwide is that there is lots of it. . . For sheer insanity, however, consider a nation that has an estimated 31 billion barrels of oil offshore of its coasts and 117 billion barrels of oil under land owned or managed by the government . . . In just one area, a desolate place designated a wildlife refuge, there’s an estimated 7.7 billion barrels untapped. . . . Most of the areas where oil is known to exist have been ruled off-limits to any exploration or extraction by the government.
In the areas where it is accessible, drilling for it is hugely encumbered and often denied by the National Environmental Policy Act, the Clean Water Act, the Endangered Species Act, and the National Historic Preservation Act.
. . . the price of a gallon of gasoline or heating oil, is making everyone miserable thanks in great part to environmental legislation . . . just to make matters worse, the government requires that every gallon of gasoline include the additive, ethanol, which reduces its mileage and increases its cost.

For once, “CBS Evening News” gave viewers a break from seeing oil companies demonized.
At a time when gas has topped $4 a gallon and the media are looking for someone to blame for “pain at the pump,” “Evening News” took a different approach and showed how one oil company is reinvesting its profits – not in politically correct alternative sources of energy, but back into the community.

In the year since Al Gore took steps to make his home more energy-efficient, the former Vice President’s home energy use surged more than 10%, according to the Tennessee Center for Policy Research.
“A man’s commitment to his beliefs is best measured by what he does behind the closed doors of his own home,” said Drew Johnson, President of the Tennessee Center for Policy Research. “Al Gore is a hypocrite and a fraud when it comes to his commitment to the environment, judging by his home energy consumption.”
In the past year, Gore’s home burned through 213,210 kilowatt-hours (kWh) of electricity, enough to power 232 average American households for a month.

I haven’t had time to turn on the radio, but I think I can safely bet that Rush and the rest of the radio crowd are on this, and have been plugging it for weeks. (Oh, and I’ll bet they’re planting stuff in online forums, especially sports forums. They use forums a lot for word-of-mouth generation.)
So see the big picture – see the forest – and learn from it.

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This post originally appeared at Speak Out CaliforniaAs I wrote the other day, the California Chamber of Commerce has come out with their annual list of “job-killer” bills. The list only targets bills by Democrats, and the bills are all acts that would help the people of California by improving the environment, worker wage and safety, public health, etc.
The California Chamber of commerce is a lobbying association. They represent their members: businesses, many of which are large corporations. This is about private greed vs. the public good. The Chamber’s job is to convince the legislature to pass laws that enrich the owners of the corporations that fund them. Nothing more, nothing less.
If that involves convincing the public of something, then they do that. Hence the label “job killer.”
But the companies represented by the Chamber are the real job killers. They outsource jobs to other countries. They lay people off when they calculate it will maximize their profits. They employ as many people as needed to maximize the income to and wealth of their owners. Nothing more, nothing less.
The very idea that the Chamber of Commerce would care if something is a “job killer” is ludicrous when you understand their function. They are a lobbying association that represents the interests of companies that eliminate as many jobs as they want to, at their discretion, and then use some of the money that would have been paid in salaries to pay the Chamber to convince us to support their interests — and the rest of it to enrich themselves, which is their primary interest.
That is how corporations work in the modern, “free-market” world that we find ourselves in since the Reagan era. Not for the public benefit, not necessarily even for the company’s benefit, but for the financial benefit of the executives and (some of) the owners of the company.
Private greed vs. public good. Nothing more, nothing less.
So there isn’t really an argument about whether the “job-killer” bills on this year’s list really do or do not “kill jobs.” That is not the point of the label. Instead it is up to us to understand who we are hearing from. If we get caught up in arguing about whether these bills create more jobs than they might cost, we’re missing the point. Their arguments are propaganda with no basis in reality, designed to do nothing more than sway opinion. The point of the “job-killer” label is to make people afraid for their jobs, not to actually argue that these bills will or will not actually “kill” any jobs.
For example, a bill to require energy efficiency in new housing construction obviously creates many new jobs in the new, innovative “green” industries. But such a bill might lower the profits that go into the pockets of the executives and owners of some of the companies that the California Chamber of Commerce represents. (The LA Times on Wednesday said the Chamber’s agenda “seems dominated by development and energy interests”.) And, again, it is irrelevant whether the bill might or might not really cost jobs in some of those companies. The Chamber doesn’t care. That is not their function.
The use of the label “job killers” is about scaring the public. Nothing more, nothing less. It is about fear. It is about creating a climate in which people who are afraid for their jobs will go along with measures designed to enrich the owners of the companies that the Chamber — a lobbying association — represents.
So please don’t be fooled. Don’t be swayed by propaganda designed to make you afraid. As I wrote above, it is up to us to understand who we are hearing from.Click through to Speak Out California

Update Jay Buckey has posted this as a DailyKos diary. I suggest giving it a recommend to get this idea into discussion.
I just came across this. Jay Buckey is running for the Senate in New Hampshire, and he just came out with a proposal to put a National Security Levy on Oil so WE, THE PEOPLE benefit from high oil prices, instead of just sending all that money to others. Go see his post on this over at the progressive blog Blue Hampshire: Taking Back Our Future and Our Freedom: A Policy Proposal. Excerpts:

Right now, every time we fill up our cars, we’re sending money to foreign countries — where roughly 60 percent of the more than 20 million barrels of oil we use everyday is produced. It’s like they’re taxing us, for their benefit.
Some of those countries, like Canada, are close allies, but others aren’t. And whenever we put a gallon of gas in our cars, we’re using our hard-earned dollars to help fund foreign oil producers in the Mideast, in Russia, and elsewhere.
Moreover, OPEC and other oil-producing countries have been able to lower and raise oil prices like puppeteers pulling the strings. Alternative energy companies have often failed when oil prices were low; American consumers – especially lower-income citizens – have been stretched almost to the breaking point when prices spike.
It’s time to put a stop to this.
The National Security Levy will move us toward energy independence and secure the future of our country for our children.
Here’s how it will work: the National Security Levy will be a fee on all oil consumption in the United States – combined with a price floor that guarantees oil will not sink below a certain price.
. . . If the world price of oil falls, the National Security Levy will be increased, so that the price in the US remains above a certain established floor. This means that alternative energy producers won’t be wiped out by temporary declines in world oil prices, as happened in the 1980s; they’ll know that the price of oil in the US would not be allowed to fall below the floor price.
If, however, the price of world oil spikes dramatically, then the National Security Levy would be suspended during the spike.

I love this. A levy, so WE, THE PEOPLE get the benefit of the price fluctuations, either through a tax that we can use to pay for important things like schools, or through alternative energy incentives!
This guy is great. Go read. Here is his campaign site. If you agree that WE THE PEOPLE should be receiving the benefits from the high oil prices, instead of others, give him a few bucks. In fact, give Jay a few Buckeys!
A bit more from Jay’s post,

As part of his efforts to combat global warming, Senator John Edwards announced today that he will make his campaign “carbon neutral.” Edwards believes global warming is one of the great challenges facing America and the world and that we can all take immediate action to decrease the amount of carbon we produce. By conserving energy and purchasing carbon offsets, the Edwards campaign will offset the carbon emitted by Edwards and his staff’s campaign travel, and the energy used in his campaign headquarters and field offices.
“Global warming is an emergency and we can’t wait until the next president is elected to take action,” said Edwards. “Each of us can take responsibility in small ways to make a big difference. I encourage all Americans to conserve energy in their own homes and workplaces and help fight global warming.”

People still buy real estate that will be underwater in a few decades. Think about that.
The reason we don’t take global warming seriously in America is because ExxonMobil has been spending millions and millions of dollars funding a PR campaign designed to shift our attention away from the problem. This has been very good for business for them, but it has caused each and every one of us to behave in ways that are counter to our OWN and society’s interests.One day this will change. One day the consequences of global warming will become too serious to ignore. One day ExxonMobil will stop paying the Competitive Enterprise Institute and the Center for Defense of Free Enterprise and Citizens for a Sound Economy and the American Enterprise Institute and the Frontiers of Freedom Institute and the Heritage Foundation and the Hoover Institution and the National Center for Policy Analysis and the hundreds of other right-wing “think tanks” they pay to tell us global warming is a hoax (read the report), and then the fog will start to lift and we will start to see the world as it is — the “reality-based” world we live in rather than the one we see on TV.
How is this a “Today’s Housing Bubble Post?” Think about what will happen to real estate prices in coastal areas when we do start taking global warming seriously. How much will people pay for real estate that is going to be under water in a few decades?